bdn-ex991

Radnor, PA, July 20, 2017 — Brandywine Realty Trust (NYSE:BDN) today reported its financial and operating results for the three and six-month periods ended June 30, 2017.

“We are encouraged by the continued execution of our 2017 business plan during the second quarter,” stated Gerard H. Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. “Our 2017 speculative revenue target is now 98% complete. We have also completed 75% of our 2017 net disposition target. Our balance sheet continued to strengthen during the second quarter as we redeemed our $100.0 million, 6.9% perpetual preferred shares, at par, and repaid our $300.0 million unsecured bonds upon maturity funded through a combination of cash and our unsecured line of credit. During the quarter, we also delivered our 111,000 square foot, 100% pre-leased, build-to-suit property in King of Prussia, Pennsylvania. With our operating plan substantially complete and, in assessing the occupancy timing of our leasing pipeline, several tenants delaying actual occupancy of their leased space and the staged delivery of some of the residential units at FMC Tower at Cira Centre South, we are revising and narrowing our 2017 FFO guidance range from $1.33 to $1.40 to $1.34 to $1.38 per diluted share.”

555 East Lancaster Avenue, Suite 100, Radnor, PA 19087 Phone: (610) 325-5600 • Fax: (610) 325-5622

Net income allocated to common shares totaled $4.1 million or $0.02 per diluted share in the second quarter of 2017 compared to a net loss of ($3.1 million) or ($0.02) per diluted share in the second quarter of 2016.

FFO available to common shares and units $57.4 million or $0.32 per diluted share in each of the second quarters ended in 2017 and 2016. Our 2017 results include a one-time, non-cash charge related to our preferred share redemption totaling $3.2 million, or $0.02 per diluted share. Our second quarter 2017 payout ratio ($0.16 common share distribution / $0.32 FFO per diluted share) was 50.0%.

Net income allocated to common shares totaled $23.4 million or $0.13 per diluted share in the first six months of 2017 compared to net income of $41.0 million or $0.23 per diluted share in the first six months of 2016.

Our FFO available to common shares and units for the first six months of 2017 totaled $113.5 million, or $0.64 per diluted share versus $45.7 million, or $0.26 per diluted share in the first six months of 2016. Our 2016 results included a $66.6 million, or $0.38 per share, charge for the early extinguishment of debt related to our sale of Cira Square. Excluding the early extinguishment of debt, FFO available to common shares and units in the first six months of 2016 totaled $112.3 million or $0.63 per diluted. Our first six months 2017 FFO payout ratio ($0.32 common share distribution / $0.64 FFO per diluted share) was 50.0%.

In the second quarter of 2017, our Net Operating Income (NOI) excluding termination revenues and other income items increased 1.2% on a GAAP basis and increased 10.1% on a cash basis for our 93 same store properties, which were 92.2% and 94.0% occupied on June 30, 2017 and June 30, 2016, respectively.

We leased approximately 995,000 square feet and commenced occupancy on 973,000 square feet during the second quarter of 2017. The second quarter occupancy activity includes 781,000 square feet of renewals, 173,000

square feet of new leases and 19,000 square feet of tenant expansions. We have an additional 191,000 square feet of executed new leasing scheduled to commence subsequent to June 30, 2017.

We achieved a 77.0% tenant retention ratio in our core portfolio with net negative absorption of (60,000) square feet during the second quarter of 2017. Second quarter rental rate growth increased 1.3% as our renewal rental rates increased 1.1% and our new lease/expansion rental rates increased 7.1%, all on a GAAP basis.

At June 30, 2017, our core portfolio of 94 properties comprising 15.0 million square feet was 92.2% occupied and we are currently 93.5% leased (reflecting new leases commencing after June 30, 2017).

On May 18, 2017, our Board of Trustees declared a quarterly dividend distribution of $0.16 per common share that is payable on July 21, 2017 to shareholders of record as of July 7, 2017.

Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are adjusting our previously issued 2017 net income guidance of $0.20 to $0.27 per diluted share to $0.17 to $0.21 per diluted share and adjusting our previously issued 2017 FFO guidance of $1.33 to $1.40 per diluted share to $1.34 to $1.38 per diluted share. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of 2017 FFO and earnings per diluted share:

Our 2017 FFO guidance does not include income arising from the sale of undepreciated real estate. Other key assumptions include:

Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Washington, D.C., and Austin markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 199 properties and 26.7 million square feet as of June 30, 2017, which excludes assets held for sale. Our purpose is to shape, connect and inspire the world around us through our

expertise, the relationships we foster, the communities in which we live and work, and the history we build together. For more information, please visit www.brandywinerealty.com.

BDN management will discuss 2017 financial results and earnings guidance for fiscal 2017 on Friday, July 21, 2017, during the company’s earnings call. The call will begin at 9:00 a.m. EDT and will last approximately one hour. The conference call can be accessed by dialing 1-800-683-1525 and providing conference ID: 26630557. Beginning two hours after the conference call, a taped replay of the call can be accessed through Friday, August 4, 2017, by calling 1-855-859-2056 and entering access code 26630557. The conference call can also be accessed via a webcast on our website at www.brandywinerealty.com.

We anticipate we will release our third quarter 2017 earnings on Wednesday, October 18, 2017, after the market close and will host our third quarter 2017 conference call on Thursday, October 19, 2017 at 9:00 a.m. Eastern Time. We expect to issue a press release in advance of these events to reconfirm the dates and times and provide all related information.

Estimates of future earnings per share, FFO per share, common share dividend distributions and certain other statements in this release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our and our affiliates’ actual results, performance, achievements or transactions to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors relate to, among others: our ability to lease vacant space and to renew or relet space under expiring leases at expected levels; competition with other real estate companies for tenants; the potential loss or bankruptcy of major tenants; interest rate levels; the availability of debt, equity or other financing; risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns; unanticipated operating and capital costs; our ability to obtain adequate insurance, including coverage for terrorist acts; dependence upon certain geographic markets; and general and local economic and real estate conditions, including the extent and duration of adverse changes that affect the industries in which our tenants operate. Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2016. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

We compute our financial results in accordance with generally accepted accounting principles (GAAP). Although FFO and NOI are non-GAAP financial measures, we believe that FFO and NOI calculations are helpful to shareholders and potential investors and are widely recognized measures of real estate investment trust performance. At the end of this press release, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure.

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than us. NAREIT defines FFO as net income (loss) before non-controlling interests and excluding gains (losses) on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing

costs), and after similar adjustments for unconsolidated joint ventures. Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on property sales,

extraordinary items and non-controlling interests. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release. FFO does not represent cash flow from operating activities (determined in accordance with GAAP) and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.

NOI is a financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interest in the Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interest in property partnerships. In some cases we also present NOI on a cash basis, which is NOI after eliminating the effects of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions. NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in order to provide results that are more closely related to a property's results of operations. NOI is used internally to evaluate the performance of our operating segments and to make decisions about resource allocations. We concluded that NOI provides useful information to investors regarding our financial condition and results of operations, as it reflects only the income and expense items incurred at the property level, as well as the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unlevered basis.

Our core portfolio is comprised of our wholly-owned properties, excluding any properties currently in development, re-development or re-entitlement.

	June 30,			December 31,
	2017			2016
ASSETS	(unaudited)
Real estate investments:
Operating properties	$	3,769,678		$	3,586,295
Accumulated depreciation		(882,228	)		(852,476	)
Operating real estate investments, net		2,887,450			2,733,819
Construction-in-progress		119,690			297,462
Land held for development		125,157			150,970
Total real estate investments, net		3,132,297			3,182,251
Assets held for sale, net		5,569			41,718
Cash and cash equivalents		37,900			193,919
Accounts receivable, net of allowance of $2,936 and $2,373 as of June 30, 2017 and December 31, 2016, respectively		13,151			12,446
Accrued rent receivable, net of allowance of $13,857 and $13,743 as of June 30, 2017 and December 31, 2016, respectively		158,420			149,624
Investment in real estate ventures, at equity		262,107			281,331
Deferred costs, net		93,410			91,342
Intangible assets, net		59,410			72,478
Other assets		110,185			74,104
Total assets	$	3,872,449		$	4,099,213
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable, net	$	319,405		$	321,549
Unsecured credit facility		200,000			-
Unsecured term loans, net		248,264			248,099
Unsecured senior notes, net		1,144,503			1,443,464
Accounts payable and accrued expenses		99,904			103,404
Distributions payable		28,376			30,032
Deferred income, gains and rent		40,764			31,620
Acquired lease intangibles, net		15,989			18,119
Liabilities related to assets held for sale		-			81
Other liabilities		17,521			19,408
Total liabilities	$	2,114,726		$	2,215,776

Brandywine Realty Trust's Equity:
Preferred Shares (shares authorized-20,000,000)
6.90% Series E Preferred Shares, $0.01 par value; issued and outstanding- 0 as of June 30, 2017 and 4,000,000 as of December 31, 2016		-			40
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 175,389,815 and 175,140,760 issued and outstanding as of June 30, 2017 and December 31, 2016, respectively		1,754			1,752
Additional paid-in-capital		3,165,935			3,258,870
Deferred compensation payable in common shares		14,107			13,684
Common shares in grantor trust, 1,000,966 as of June 30, 2017, 899,457 as of December 31, 2016		(14,107	)		(13,684	)
Cumulative earnings		568,078			539,319
Accumulated other comprehensive loss		(1,528	)		(1,745	)
Cumulative distributions		(1,993,419	)		(1,931,892	)
Total Brandywine Realty Trust's equity		1,740,820			1,866,344
Non-controlling interests		16,903			17,093
Total beneficiaries' equity		1,757,723			1,883,437
Total liabilities and beneficiaries' equity	$	3,872,449		$	4,099,213

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Revenue
Rents	$	101,557		$	103,624		$	204,889		$	213,787
Tenant reimbursements		18,038			15,937			36,573			35,991
Termination fees		140			554			1,813			848
Third party management fees, labor reimbursement and leasing		7,080			6,208			13,565			11,443
Other		976			858			1,871			1,614
Total revenue		127,791			127,181			258,711			263,683
Operating expenses:
Property operating expenses		37,215			36,079			74,100			76,958
Real estate taxes		11,078			11,481			22,827			23,367
Third party management expenses		2,325			2,661			4,772			4,671
Depreciation and amortization		44,263			46,907			90,155			95,780
General and administrative expenses		6,320			6,076			15,745			15,196
Provision for impairment		327			5,679			3,057			13,069
Total operating expenses		101,528			108,883			210,656			229,041
Operating income		26,263			18,298			48,055			34,642
Other income (expense)
Interest income		163			359			556			679
Interest expense		(20,304	)		(19,829	)		(41,741	)		(43,520	)
Interest expense - amortization of deferred financing costs		(596	)		(644	)		(1,230	)		(1,418	)
Interest expense - financing obligation		-			(242	)		-			(523	)
Equity in income (loss) of Real Estate Ventures		1,084			(1,666	)		336			(2,069	)
Net gain (loss) on disposition of real estate		1,088			(727	)		8,411			114,729
Net gain on real estate venture transactions		-			3,128			14,582			9,057
Loss on early extinguishment of debt		-			-			-			(66,590	)
Net income (loss)		7,698			(1,323	)		28,969			44,987
Net (income) loss attributable to non-controlling interests		(45	)		22			(214	)		(367	)
Net income (loss) attributable to Brandywine Realty Trust		7,653			(1,301	)		28,755			44,620
Distribution to preferred shareholders		(307	)		(1,725	)		(2,032	)		(3,450	)
Preferred share redemption charge		(3,181	)		-			(3,181	)		-
Nonforfeitable dividends allocated to unvested restricted shareholders		(73	)		(79	)		(172	)		(184	)
Net income (loss) attributable to Common Shareholders of Brandywine Realty Trust	$	4,092		$	(3,105	)	$	23,370		$	40,986

PER SHARE DATA
Basic income (loss) per common share	$	0.02		$	(0.02	)	$	0.13		$	0.23
Basic weighted average shares outstanding		175,333,300			175,013,291			175,255,564			174,901,118

Diluted income (loss) per common share	$	0.02		$	(0.02	)	$	0.13		$	0.23
Diluted weighted average shares outstanding		176,756,598			175,013,291			176,480,380			175,823,970

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Reconciliation of Net Income to Funds from Operations:
Net income (loss) attributable to common shareholders	$	4,092		$	(3,105	)	$	23,370		$	40,986
Add (deduct):
Net income (loss) attributable to non-controlling interests - LP units		37			(26	)		201			361
Nonforfeitable dividends allocated to unvested restricted shareholders		73			79			172			184
Net gain on real estate venture transactions		-			(3,128	)		(14,582	)		(9,057	)
Net (gain) loss on disposition of real estate		(1,088	)		727			(8,411	)		(114,729	)
Provision for impairment		-			5,679			2,730			13,069
Depreciation and amortization:
Real property		35,948			33,577			69,598			66,852
Leasing costs including acquired intangibles		8,131			13,231			20,249			28,745
Company’s share of unconsolidated real estate ventures		10,449			10,549			20,689			19,554
Partners’ share of consolidated real estate ventures		(64	)		(59	)		(123	)		(118	)
Funds from operations	$	57,578		$	57,524		$	113,893		$	45,847
Funds from operations allocable to unvested restricted shareholders		(151	)		(161	)		(349	)		(115	)
Funds from operations available to common share and unit holders (FFO)	$	57,427		$	57,363		$	113,544		$	45,732

FFO per share - fully diluted	$	0.32		$	0.32		$	0.64		$	0.26

Weighted-average shares/units outstanding - fully diluted/basic		178,236,397			177,688,180			177,960,179			177,355,730

Distributions paid per common share	$	0.16		$	0.16		$	0.32		$	0.31

FFO payout ratio (distributions paid per common share/FFO per diluted share)		50.0	%		50.0	%		50.0	%		119.2	%

Of the 99 properties owned by the Company as of June 30, 2017, a total of 93 properties ("Same Store Properties") containing an aggregate of 14.9 million net rentable square feet were owned for the entire three-month periods ended June 30, 2017 and 2016. As of June 30, 2017, one property was recently completed/acquired, two properties were in development and three properties were in redevelopment. Average occupancy for the Same Store Properties was 92.8% during 2017 and 94.0% during 2016. The following table sets forth revenue and expense information for the Same Store Properties:

	Three Months Ended June 30,
	2017			2016
Revenue
Rents	$	93,483		$	93,690
Tenant reimbursements		16,831			14,838
Termination fees		140			73
Other		563			395
Total revenue		111,017			108,996

Operating expenses
Property operating expenses		31,895			31,000
Real estate taxes		10,149			10,072
Net operating income	$	68,973		$	67,924

Net operating income - percentage change over prior year		1.5	%

Net operating income, excluding net termination fees & other	$	68,270		$	67,456

Net operating income, excluding net termination fees & other - percentage change over prior year		1.2	%

Net operating income	$	68,973		$	67,924
Straight line rents & other		(2,213	)		(6,279	)
Above/below market rent amortization		(440	)		(1,669	)
Amortization of tenant inducements		350			342
Non-cash ground rent		22			22
Cash - Net operating income	$	66,692		$	60,340

Cash - Net operating income - percentage change over prior year		10.5	%

Cash - Net operating income, excluding net termination fees & other	$	65,866		$	59,822

Cash - Net operating income, excluding net termination fees & other - percentage change over prior year		10.1	%

	Three Months Ended June 30,
	2017			2016
Net income (loss)	$	7,698		$	(1,323	)
Add/(deduct):
Interest income		(163	)		(359	)
Interest expense		20,304			19,829
Interest expense - amortization of deferred financing costs		596			644
Interest expense - financing obligation		-			242
Equity in (income) loss of real estate ventures		(1,084	)		1,666
Net gain on real estate venture transactions		-			(3,128	)
Net (gain) loss on disposition of real estate		(1,088	)		727
Depreciation and amortization		44,263			46,907
General & administrative expenses		6,320			6,076
Provision for impairment		327			5,679
Consolidated net operating income		77,173			76,960
Less: Net operating income of non-same store properties and elimination of non-property specific operations		(8,200	)		(9,036	)
Same store net operating income	$	68,973		$	67,924

Of the 99 properties owned by the Company as of June 30, 2017, a total of 93 properties ("Same Store Properties") containing an aggregate of 14.9 million net rentable square feet were owned for the entire six-month periods ended June 30, 2017 and 2016. As of June 30, 2017, one property was recently completed/acquired, two properties were in development and three properties were in redevelopment. Average occupancy for the Same Store Properties was 93.1% during 2017 and 93.9% during 2016. The following table sets forth revenue and expense information for the Same Store Properties:

	Six Months Ended June 30,
	2017			2016
Revenue
Rents	$	187,927		$	186,953
Tenant reimbursements		33,507			31,104
Termination fees		1,336			191
Other		1,013			937
Total revenue		223,783			219,185

Operating expenses
Property operating expenses		63,964			63,449
Real estate taxes		20,495			20,055
Net operating income	$	139,324		$	135,681

Net operating income - percentage change over prior year		2.7	%

Net operating income, excluding net termination fees & other	$	136,975		$	134,553

Net operating income, excluding net termination fees & other - percentage change over prior year		1.8	%

Net operating income	$	139,324		$	135,681
Straight line rents & other		(3,955	)		(11,741	)
Above/below market rent amortization		(1,793	)		(3,679	)
Amortization of tenant inducements		699			686
Non-cash ground rent		44			44
Cash - Net operating income	$	134,319		$	120,991

Cash - Net operating income - percentage change over prior year		11.0	%

Cash - Net operating income, excluding net termination fees & other	$	131,100		$	119,526

Cash - Net operating income, excluding net termination fees & other - percentage change over prior year		9.7	%

	Six Months Ended June 30,
	2017			2016
Net income:	$	28,969		$	44,987
Add/(deduct):
Interest income		(556	)		(679	)
Interest expense		41,741			43,520
Interest expense - amortization of deferred financing costs		1,230			1,418
Interest expense - financing obligation		-			523
Equity in (income) loss of real estate ventures		(336	)		2,069
Net gain on real estate venture transactions		(14,582	)		(9,057	)
Net gain on disposition of real estate		(8,411	)		(114,729	)
Loss on early extinguishment of debt		-			66,590
Depreciation and amortization		90,155			95,780
General & administrative expenses		15,745			15,196
Provision for impairment		3,057			13,069
Consolidated net operating income		157,012			158,687
Less: Net operating income of non-same store properties and elimination of non-property specific operations		(17,688	)		(23,006	)
Same store net operating income	$	139,324		$	135,681

Guidance for 2017				Range

	Income per diluted share allocated to common shareholders	$	0.17	to	$	0.21
	Plus: real estate depreciation, amortization		1.17			1.17

	FFO per diluted share	$	1.34	to	$	1.38